Gold trading is one of the world’s most reliable portfolio investments as a hedge against inflation. Buying and selling gold while aiming to gain profit from the gold price movements on gold markets, is what we call gold trading. The currency code for the gold spot is XAU, which refers to the price of one troy ounce (31.1035 grams) of gold.
Investing in gold with proper knowledge of what influences the gold price is considered to be a safe-haven investment during times of political or economic instability. It is called a safe-haven investment because mostly gold retains or increases its value during times of market turbulence.
In order to gain profit from gold trading, a normal gold trader shall simply target to buy gold when the price is low and sell it when the price is high. It is theoretically as simple as that. However, real-life gold trading is not as simple as it seems in theoretical knowledge. The chances of making a profit in gold trading for a new or inexperienced gold trader go hand in hand with the risk of making losses.
Gold markets like any other commodity markets can be extremely volatile. What drives gold prices can vary at different times depending on prevailing sentiment in the financial markets, which may result in a high degree of risk for losses. This uncertainty can be caused by any number of factors like pandemics, wars, regulatory risks, or even political elections.
A successful real-life gold trader needs extensive practical knowledge of what influences the price of gold. Trading strategies designed for other assets like stocks and currency pairs do not work in the same way for gold trading. It requires careful consideration to trade gold, that’s why we are here to assist you with the right and successful gold trading decisions and mitigate your risk for losses.
Gold is not only bought as an investment but also for use in other areas such as electronic industries and jewelry making. The potential influences on the gold price are extensive, and include but are not limited to the:
- Investment demand
- Jewelry demand
- Currency markets
- Inflation or deflation
- Interest rates and/or monetary policy
- Risk aversion or appetite
- Equity markets